Quick Facts

Countries:
Where the impacts of the investment may be experienced.
  • Uruguay
Location: North-east of the country
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Banks:
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
  • Inter-American Development Bank (IADB)
  • Inter-American Investment Corporation (IIC)
Bank Risk Rating: B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Board Decision Date: 2017-05-09
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower or Client: Difebal S.A.
The holder of the loan, grant, or other investment.
Investment Type(s): Loan
The categories of the bank investment: loan, grant, etc.
Loan Amount (USD): $ 40.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD): $ 100.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.

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Primary Source

Original disclosure @ IIC website
Updated in EWS: 2017-10-30
Disclosure Date: 2017-04-03
Melo-Tacuarembo Transmission Line
IIC-12041-01

Project Description
The Uruguayan national utility, Usinas y Trasmisiones Electricas ("UTE") launched in July 2016 the bidding for the construction of a 213Km transmission line of 150Kv connecting the substation of Melo, with the station of Tacuarembo in the north-east of the country (the "Project"). This represents the first of several projects, which will be launched aiming to improve and upgrade the existing transmission network in the country. After an international bidding process, the Project was awarded in July to the Italian transmission company Terna S.p.A ("Terna"), a BBB rated company by S&P, a leading player in the European market with more than 15 years of experience in the construction of transmission lines.The Project is structured under an Operating Lease, by which Terna, through a special purpose vehicle ("SPV"), Difebal S.A., will design and construct the transmission line, and once commercial operation is reached, UTE will carry out the operation and maintenance of the Project, and will pay Terna a monthly payment for 30 years as per the terms and conditions of the lease. ENVIRONMENTAL REVIEW Overview of Scope of IIC E&S Review This summary is based on information provided by Terna and UTE (Environmental Impact Assessment - EIA, Project Document, Construction Environmental Management Plan, SACEEM's Integrated Management System Manual, SACEEM's 2016 Statistical Accident Rate Report, Application and Additional Information from the National Directorate for the Environment (DINAMA) and DINAMA's Classification of the Project as a "B" project), as well as the due diligence conducted between February 6 and February 9, 2017. During that visit, meetings were held with the teams from Terna, SACEEM, and IIC technical consultants (Power Engineers) as well as each company's legal advisors. The visit reviewed the entire course of the line, emphasizing critical points such as river crossings, flood areas, and natural woodlands and specific visits were made to some rural settlements located along the route and affected by the easement strip. Environmental and Social Categorization and Rationale In accordance with the IIC Environmental and Social Sustainability Policy, the Project has been classified as a category "B" because it will produce effects that can be avoided or managed by following previously known performance standards, guidelines, and construction and management criteria for projects of this kind. The main environmental and labor aspects related to the Project are: effect on the biological environment and biodiversity, efficiency in the use of resources and pollution prevention, work and labor conditions, community health and safety. The most significant risks will be concentrated in the construction stage and will be local in nature, temporary, reversible for the most part, and can be eliminated or mitigated through appropriate management systems. Environmental and Social Context The high voltage line (500 kV) will be 213 km long and will connect the existing substation near the city of Melo, in the Department of Cerro Largo, with another to be constructed near the city of Tacuarembo, in the Department of Tacuarembo, Uruguay. The substation to be constructed is not part of this Project.The geography of the land, with rolling pastures without steep slopes or significant geographic features and elevations between 90 and 170 MASL, allows for a relatively direct path. Most of the sites where towers will be installed can be accessed via existing roads.The projected easement strip is 80 m wide all along the length of the line. The Project includes the installation of 556 towers between 350 and 400 meters apart. The route crosses entirely rural areas, avoids population centers, and has sought to avoid installing towers on agricultural land. The line does not cross through indigenous territories nor sites considered to have high archeological, paleontological, or cultural val
Investment Description
The estimated total cost of the Project is of up to US$100 million, which will be financed through an IDBG A/B loan consisting of an IIC A loan of up to US$10 million and IDB A loan of up to US$30 million, a China Fund Loan of US$20 million and a B loan of US$25 million to be provided by one commercial bank. The financial plan will be completed with equity contributions for an amount of US$15 million for 85/15 debt-to-equity ratio. Both the A and B loan tranches are expected to have a tenor of up to 15-years door-to-door.The Uruguayan company SACEEM was contracted by Terna to carry out the design, supply, construction, and electromechanical assembly work on all Project components.
Contact Information
ACCOUNTABILITY MECHANISM OF IIC The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IIC)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IIC is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).